The African fintech sector secured $1.45 billion in funding for 2022, a 39.3 percent increase from the previous year, according to the latest African Tech Startups Funding Report.
The eighth edition of the report published by Disrupt Africa, a startup news and research portal, said the sector was the most attractive to investors last year, making up 43.4 percent of all startup investments ($3.3billion) into the continent.
“In all, 205 fintech startups raised funding, with Nigerian fintech making up almost 40 percent of startups and 46 percent of fintech funding,” it said.
It said that African unicorn Flutterwave led the pack with a $250 million raise followed by Moove ($181.8 million) and Yellow Card ($40 million).
“Egyptian fintechs also had a strong year, with key rounds raised by MNT-Halan ($150 million), Paymob ($50 million) and Khazna ($38 million).”
A recent report by McKinsey & Company, a global management consulting firm estimates that fintech revenues in Africa could grow by eight times to reach $30.3 billion by 2025 from $3.8 billion in 2020.
According to the company, the success of fintech companies is being fuelled by several trends, including increasing smartphone ownership, declining internet costs, expanded network coverage, and a young, fast-growing, and rapidly urbanizing population.
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“African fintech has a significant impact on day-to-day life on the continent and with its current upward trend it can be perfectly poised to rapidly advance Africa’s global competitiveness with an increase in the exporting of fintech services globally,” it said.
The startups funding report also revealed that despite fintech’s domination, other sectors also received funding. “The next biggest sector for startup funding was e-commerce and retail-tech which pulled in over $556 million, followed by e-health startups which raised over $189 million.”
Other sectors were logistics with $95.1 million, ed-tech ($24.6 million), energy ($150.7 million), agri-tech ($132.8 million) and transport ($220.9 million).
Gabriella Mulligan, co-founder at Disrupt Africa, said In spite of global pressures, 2022 was another outstanding year for the African tech space.
“Who knows what the future holds, and whether the sector will now enter a more fallow period, but for now the space can reflect on a very good 12 months’ work,” she said.
The report which used to be purchased each year by leading tech companies, Big Four consulting firms, banking and fintech leaders, venture capital firms, supranational investors and international trade bodies will now be free, making it accessible to African entrepreneurs.
“Supporting Disrupt Africa’s research efforts and further spotlighting the exceptional African entrepreneurship ecosystem is an honour,” Ramez El-Serafy, chief executive officer at Flat6Labs said.
“African countries harbor exceptional innovative and disruptive energy that can transform tech-enabled industries and boost economic development in the continent. We are excited to become a larger part of these pivotal moments in its growth story.”
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